Jo-Ann experiences strength in fabric & sewing merchandise
Jo-Ann Stores, Inc. reported net sales results for the third quarter of fiscal 2010, provided preliminary expectations for third quarter earnings per share, and increased its full year fiscal 2010 outlook.
Net sales for the third quarter ended October 31, 2009 increased 6.0% to $509.1 million from $480.1 million for the same period last year. Same-store sales increased 4.3% compared with a 1.5% same-store sales decrease for the third quarter last year. Traffic increased 4.9% while average ticket declined 0.6%.
Large-format store net sales for the quarter increased 8.7% to $272.0 million compared to the same period last year. Same-store sales for large-format stores increased 2.3% compared with a decrease of 3.8% in last year's third quarter. Small-format store net sales increased 3.0% to $228.5 million compared to the same period last year. Same-store sales for small-format stores increased 6.7% compared with an increase of 1.2% for the same period last year. Internet sales through Joann.com increased 6.2% to $8.6 million compared to the same period last year.
Sewing same-store sales increased 8.1%. The company continued to experience strength in the majority of its fabric and sewing notions merchandise categories. Non-sewing same-store sales increased 0.1% due to growth in core craft merchandise categories offset by continued weakness in seasonal and custom framing merchandise categories.
Net sales for the nine-month period ended October 31, 2009 were $1.39 billion versus $1.33 billion in the prior year. Same-store sales increased 2.5% for the nine-month period compared with a 1.9% increase for the same period last year.
Fiscal Third Quarter 2010 Expected Results
Based on the better than expected sales results, the company currently expects fiscal third quarter 2010 earnings per diluted share within a range of $0.88 to $0.90, compared to $0.40 per diluted share in the third quarter of fiscal 2009. Earnings for the third quarter of fiscal 2009 included $0.05 per diluted share related to the purchase of a portion of the company's senior subordinated notes. Excluding this gain, earnings for the third quarter of 2009 were $0.35 per diluted share.
Fiscal 2010 Outlook
Based upon the company's year-to-date results and management's operating assumptions for the remainder of the year the company is increasing its previously announced expectations for fiscal 2010:
• Same-store sales up approximately 2.3% to 2.7% for the year versus the previously announced range of approximately flat to up 1%;
• Earnings per diluted share in the range of $1.95 to $2.05 for the year (excluding any gains on debt purchases) versus the previously announced range of $1.35 to $1.50.
The company is updating its guidance at this time given the significantly better than expected sales and earnings performance for the third quarter and fiscal year to date. In the future, investors should not expect the company to provide interim updates of quarterly results or the company's outlook information in advance of scheduled quarterly earnings announcement dates. Additional key considerations related to the company's outlook will be provided in the third quarter earnings release scheduled for December 2, 2009.
Jo-Ann Stores, Inc